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DECISION

APPROVING THE SCHEME ON RENEWAL OF THE STATE MANAGEMENT OF ENTERPRISES TOWARDS NON-DISCRIMINATION AGAINST ANY FORMS OF OWNERSHIP AND ADJUSTMENT OF THE ADMINISTRATION AND OPERATION OF STATE ENTERPRISES IN ORDER TO RAISE THEIR EFFECTIVENESS UPON REALIZATION OF THE WORLD TRADE ORGANIZATION ACCESSION COMMITMENTS

THE PRIME MINISTER

Pursuant to the December 25, 2001 Law on Organization of the Government;

At the proposal of the Minister of Planning and Investment,

DECIDES:

Article 1. To approve the Scheme on renewal of (he state management of enterprises towards non-discrimination against any forms of ownership and adjustment of the administration and operation of state enterprises in order to raise their effectiveness upon realization of the World Trade Organization (WTO) accession commitments, with the following principal contents:

I. OBJECTIVES AND VIEWPOINTS

1. Objectives:

To renew the state management of enterprises towards non-discrimination against any forms of ownership; and to adjust the administration and operation of state enterprises in order to raise their effectiveness in conformity with the WTO accession commitments.

2. Viewpoints:

a/ To renew the management of enterprises to meet requirements for development of a socialist-oriented market economy in conformity with international practice and WTO accession commitments on state enterprises:

b/ To ensure the uniformity and compatibility between the content of state management and the organization of the executing apparatus and between legal provisions and the practice of state management of enterprises:

c/ To use common tools of state management of enterprises of all forms of ownership and types. For cases involving national interests, international commitments or natural monopoly and other particular cases which need reasonable different treatment, appropriate contents and modes of management should be determined, which, however, must not contravene Vietnam's regulations and commitments upon accession to international organizations.

d/ To adjust the operation of state enterprises in conformity with the WTO accession commitments and in harmony with the overall program on the implementation of commitments and the performance of obligations of WTO members and the program on establishing the institutions of a socialist-oriented market economy in order to satisfy the requirements for reorganization, renewal and raising of effectiveness of state enterprises;

e/ To ensure equality among enterprises of all types when adjusting the relationship between the Slate and state enterprises, foreign-invested enterprises and private enterprises in the market economy.

f/ To separate the state management from the administration by state enterprise owners in terms of contents and methods of management, apparatus organization and implementation.

II. MAJOR SOLUTIONS

1. Mechanisms and policies

- To narrow disparities towards applying uniform business conditions to enterprises of all forms of ownership and types. To reduce areas of state monopoly and state trading and privileges of state enterprises. To publicize conditions and eligible entities and apply the mechanism of competition among enterprises of all types that wish to trade in. produce and provide products and services in the areas of state monopoly or trading (excluding those directly serving defense and security).

- To perfect the mechanisms for reorganization, dissolution and bankruptcy applicable to enterprises of all types. State management agencies may not provide financial support to state enterprises subject to dissolution and bankruptcy, except special cases which would be transferred to the state capital investment agency and specialized agencies performing the functions of a state owner. To further perfect the inspection, examination and supervision of the operation of enterprises after business registration.

- To continue working towards a common financial management mechanism applicable to both stale enterprises and enterprises of other sectors. To refrain from directly using budget capital to purchase shares from, or contribute capital to. enterprises. To supervise investments made with capital from such sources as state budget, government bonds and state-guaranteed loans in state economic groups and corporations. To continue perfecting the mechanism on equality among and non-discrimination against any forms of ownership in the selection of categories permitted to mobilize credit or receive state support from the source of government bonds, donations and other sources.

- To further finalize a common mechanism of management of salaries and incomes applicable to enterprises of all types on the principle that salaries and incomes of employees of enterprises must be associated with their labor productivity and business effectiveness in line with the labor market level so as to ensure the harmonious interests of laborers and enterprise owners.

- To organize a national information system and improve the capacity of information and forecasting centers of ministries and branches in service of enterprises of all economic sectors. To uphold the role of professional associations in the provision of specialized information to their members, regardless of their economic sectors. To improve overseas trade and foreign affairs officials' capacity of collecting and analyzing trade and investment information. To build a database on trade and investment information accessible by enterprises of all economic sectors. To raise the capacity of staff of economic tribunals and economic arbitration centers in order to effectively support enterprises of all economic sectors in settling matters arising in the integration process such as commercial disputes, implementation of WTO agreements and realization of international commitments.

2. Reorganizing the apparatus of state management of enterprises of all types

- To reorganize the state management apparatus so as to perform the unified state management of enterprises, regardless of their forms of ownership and economic sectors. To review and reorganize slate management agencies in order to separate the apparatus and contingent of civil servants and employees performing the stale management from those of civil servants and employees shifted to perform the functions of enterprise owners. To enhance coordination among agencies performing the state management of enterprises.

- To clearly distinguish the function of state administration from the function of providing public services in state agencies at central and local levels. To commence the separation of the apparatus and personnel in charge of providing public services to enterprises in order to establish non-business service units which enjoy autonomy and take responsibility for the provision of public services to enterprises. To accelerate the socialization and transfer the provision of some supportive public services to other economic sectors.

- To continue consolidating the system of inspection, examination and supervision and improve the qualifications of inspectors and supervisors so as to ensure quality inspection, examination and supervision activities and. at the same time, restrict discrimination against and troubling of enterprises.

- To consolidate and improve the capacity of business registration and investment licensing agencies to have adequate functions and competence in certifying the market entry of enterprises; urge enterprises to observe reporting regulations; directly conduct post-registration examination and handle violating enterprises or propose competent state agencies to do so; revoke business registration certificates and request enterprises to carry out dissolution procedures according to regulations; build a database on enterprises and supply information to stale agencies and other organizations and individuals upon request according to law. To continue perfecting the one-stop shop mechanism for business registration, ensuring connection between business registration, seal carving and issuance of tax identification numbers to enterprises.

3. Separating the apparatus and personnel performing the state owner's administration

- To continue perfecting the mechanism on assignment and decentralization of the exercise of the rights and performance of the obligations of the state owner towards state economic groups, corporations and enterprises according to current regulations. To study the establishment of a specialized organization in charge of exercising the rights and performing the obligations of the state owner towards parent companies in large-scale and important state economic groups, corporations and enterprises, including the State Capital Investment Corporation, which would organize, manage and supervise the realization of State-assigned targets and protect the rights and interests of the state owner in these enterprises but not perform the state management (slate administration) over enterprises of all types.

- For enterprises providing public services or producing or providing defense and security products and services (except those in service of defense and security areas under stale monopoly) under the management of ministries and branches: to set a roadmap for separation of the owner agencies from state administration agencies; make transparent the mechanism of state management applicable to these enterprises based on the principle of diversification of participating economic sectors; conduct on a piloi basis the transformation into civil ones of state agencies and economic organizations in the defense and security domains in lines with the directions set by the Party and Stale, ensuring state secrets in the defense and security domains.

4. Solutions to perfect the mechanism of examination, supervision and evaluation of the performance of the functions of the state owner in business activities; preventing the abuse of the role of slate management agencies to carry out the owner's administration activities in stale enterprises; ensuring the state owner's influence on commercial decisions of state enterprises like other owners

- To enhance the role of the state owner's representatives and state capital managers in enterprises along the line of clearly and uniformly defining the composition and number of the state owner's representatives and state capital managers in enterprises of all types; improve the quality and increase the responsibility of the state owner's representatives and state capital managers; conduct annual evaluation of the performance of the role of the state owner's representatives and state capital managers in slate-invested enterprises. To renew business administration methods, improve transparency (especially in terms of financial matters) and raise the competitiveness of enterprises.

- To supervise and evaluate the exercise of the rights and performance of the obligations by agencies, organizations and individuals acting as the stale owner's representatives: to further supervise investments from the sources of state budget, government bonds and state-guaranteed loans in slate economic groups and corporations.

- Not to use state administrative decisions to convey decisions of the state owner. Decisions of state owners will take their own forms which are different from administrative decisions.

- To perfect the mechanism of administration of state enterprises in line with the practices of the market economy; to equally treat state owners and other owners of state enterprises of multiple ownership.

5. Solutions to ensuring transparent and systematic information on state enterprises and their reorganization, conversion and equitization

- To promulgate regulations on reporting and disclosure of information on state enterprises and the program on reorganization, equitization and conversion of state enterprises and ensure the consistency, completeness, publicity and accuracy of information.

- To specify channels and forms of publicizing information on equitization. To assign specific tasks to slate agencies involved in the equitization process so as to realize this commitments.

Article 2. Organization of implementation

1. The Ministries of Planning and Investment; Finance; Industry and Trade; Labor. War Invalids and Social Affairs; and Justice, the State Bank of Vietnam and the Government Office shall, based on the contents approved in Article 1 of this Decision, coordinate with concerned ministries and branches in performing their tasks specified in the Appendix to this Decision (not printed herein).

2. Ministries, ministerial-level agencies and provincial-level People's Committees shall:

- Within the ambit of their assigned tasks, coordinate with concerned ministries and branches in disseminating this Scheme among units and enterprises and at the same time, work out and implement solutions on renewal of the state management of enterprises towards non­discrimination against any forms of ownership and adjustment of the administration and operation of state enterprises in line with practical conditions of their localities and branches.

- Concentrate efforts on accelerating the process of converting state enterprises into limited-liability companies and joint-stock companies within the time limit prescribed in Article 166 of the Enterprise Law.

Article 3. This Decision takes effect on the date of its signing.

Article 4. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People's Committees, chairpersons of boards of directors and general directors of state economic groups and corporations shall implement this Decision.